Transfer duty on efiling

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Reginald Cole
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1 Transfer duty on efiling A QUICK GUIDE A

2 CONTENTS 1. Overview Transfer duty declarations Forms and documents required Completing the transfer duty process on the efiling website Scanning and uploading supporting documents Uploading documents Making a payment Terminology Notes to Transfer Duty forms Definitions...28 I Transfer duty on efilling A quick guide

3 1. Overview The Taxation Laws Amendment Act, 2010 (Act 8 of 2010), which was promulgated on 2 November 2010 introduced certain amendments to the Transfer Duty Act, 1949 (Act 40 of 1949), ( the Act ). In terms of the amendments to Sections 3 and 14 of the Act respectively, all transfer duty declarations and payments must be submitted electronically to SARS with effect from 1 January No manual submissions of declarations or payments will be accepted at SARS branches from this date. Declarations and payments must be made online using the SARS electronic efiling channel. This giude will give the taxpayer some insight into the process of filing tranfer duty declarations and payments ecetronically on e-filing. 2. Transfer duty declarations Which transfer duty declarations are required? There are 5 transfer duty declarations: TD1 - Declaration by Seller TD2 - Declaration by Purchaser TD3 Exemptions in terms of Section 9 of the Transfer Duty Act, No 40 of 1949 ( the Act ) TD4 - Declaration in relation to a change of beneficiaries / shareholders / members TD5- Declaration by transferor and transferee where a transaction is subject to Value-Added Tax VAT and exempt from Transfer Duty in terms of Section 9(15) of the Act. Which fields on the declarations are compulsory? All the fields are compulsory. Where a field is not applicable to your specific transaction, n/a (not applicable) should be filled in the field. If any field is left blank, SARS will consider the declaration to be incomplete and this will delay the process. Since all the declarations are electronic, how do the seller and purchaser sign it? The seller and purchaser will never sign the electronic declarations. The conveyancer submits the declarations to efiling, on behalf of the seller and purchaser and the conveyancer undertakes that the information submitted is correct and true. Once the declarations are electronically submitted, the conveyancer must print a copy of the completed submitted declaration, request the signatures of all the parties on the copies and keep a record of the copies as well as other additional information for a period of five (5) years. How many transactions may I submit a day? There is no limit placed on the number of transaction submissions per day. 1

4 3. Forms and documents required The transfer duty declaration applicable to the transaction must be completed and submitted. Note: Save each section on completion, upload supporting documents and then submit the transfer duty documents. a. Transfer of property (normal) TD1 seller TD2 buyer Supporting documentation to be uploaded: Deed of Sale b. Transfer of property [exempt in terms of Section 9 of the Transfer Duty Act, No 40 of ( the Act )] Transfer of property (exempt from duty) TD3 information of the seller and buyer as well as the exemption transaction in terms of Section 9 of the Act Supporting documentation to be uploaded: Agreement to transaction c. Transfer of shares / members interests / beneficiaries TD4 declaration in relation to a change of beneficiaries / shareholders / members Supporting documentation to be uploaded: Agreement to transaction d. Transfer of property subject to VAT TD5 declaration by transferor / transferee Supporting documentation to be uploaded: Deed of Sale e. Notarial Deeds e.g. servitudes TD1 seller / transferor deemed to be grantor TD2 buyer / transferee deemed to be a grantee Supporting documentation to be uploaded: Notarial Deed f. Usufruct / fideicommissum and other limited rights TD1 seller TD2 buyer Supporting documentation to be uploaded: Deed of Sale / Agreement between parties 2

4. Completing the transfer duty process on the efiling website Step 1 Go to www.

5 4. Completing the transfer duty process on the efiling website Step 1 Go to Click on the LOGIN button 3 Transfer duty on efilling A quick guide

6 Step 2 Either your Login details and Password Note: If you are not registered for efiling, click on REGISTER to register as per efiling requirements. 4

7 Step 3 Once you have logged in successfully, the following screen will be displayed: Click on the SERVICES button. 5 Transfer duty on efilling A quick guide

8 Step 4 Click on the Transfer Duty button in the quick links menu on the left hand side of the page to go to the transfer duty section. 6

9 Step 5 Click on Enter to go to the transfer duty forms. 7 Transfer duty on efilling A quick guide

10 Step 6 The system will automatically take you to TRANSFER DUTY screen. Click on the relevant TD form to proceed with the submission. 8

11 Step 7 Click on Declaration by Seller TD 1 to complete the declaration. 9 Transfer duty on efilling A quick guide

12 Example of a transfer duty form Below is an example of a transfer duty form. The screen that you will see will look similar to this. Note: It is compulsory to complete all fields. If a field is not applicable to your transaction, please type in n/a. 10

13 Step 8 Once the information has been captured on the relevant form (TD1,TD2, TD3, TD4 or TD5), the document can be saved and the conveyancer can edit it at a later stage. Once all the applicable declarations have been submitted to SARS, the transaction is locked to protect it against further editing. 11 Transfer duty on efilling A quick guide

14 5. Scanning and uploading supporting documents Copies of the Deeds of Sale must be electronically scanned and uploaded to the applicable Transfer Duty transaction on the SARS efiling website. Note: Uploads must be done before the transfer duty documents are submitted. Should your document be too big, only scan the pages that contain the following information: Seller and Buyer details Price Property description Date of transaction Signature of parties. 12

15 6. Uploading documents Step 1 Scan and save documents to a folder on your PC. Step 2 From the Transfer Duty dashboard click on Browse to locate the scanned documents. 13 Transfer duty on efilling A quick guide

16 Step 3 Click Upload 14

17 Example of how an uploaded document will appear: 15 Transfer duty on efilling A quick guide

18 7. Making a payment Step 1 Click on Payments. 16

19 Step 2 Select the transaction to pay by clicking the appropriate block. 17 Transfer duty on efilling A quick guide

20 Step 3 Click on Make electronic payment. 18

21 Step 4 Select the bank account from which you want to make the payment. Select the payment date in the Payment Request Date field. Click on Do Payment. 19 Transfer duty on efilling A quick guide

22 Step 5 Click Confirm to confirm your payment. Note: If required, please authorise the payment through your banking product. The efiling website offers a secure method to process payments which are transferred directly into the relevant SARS bank account. Payments can be made from the conveyancer s trust account either through credit push or authorised debit pull. Credit Push refers to payment transactions that are initiated on the efiling site and presented to the banking product as bill presentation, i.e. a payment request. Only once the user has logged into the banking product and authorised the payment request is this transaction regarded as an effective payment. Credit push transactions are irrevocable once approved. Authorised Debit Pull refers to payment transactions initiated on the efiling site and authorised for each transaction. The transaction is assumed to be successful after the user has authorised it on efiling. This payment mechanism involves the initiation of a payment instruction from SARS s bank to the client s bank. The debit push mechanism may reverse due to insufficient funds once the request is processed by the bank. Correct banking details are required to ensure the payment is successful. After successful completion of the payment transaction a payment reference number will be reflected under the payment details on the TRANSFER DUTY DASHBOARD. 20

SARS Authorisation Once applicable declarations and payments have been received by SARS, the transaction will be checked and authorised by SARS.

23 SARS Authorisation Once applicable declarations and payments have been received by SARS, the transaction will be checked and authorised by SARS. SARS will use property transfers to ensure that, where applicable, the parties concerned are on the Income Tax register and that their tax returns and taxes due are up to date. Where sellers owe taxes, conveyancers will be appointed as the agents of SARS to pay over money held by them. SARS will notify conveyancers if there are any problems relating to the tax affairs of buyers or sellers. Step 6 Once the transaction has been authorised by SARS, the Next Action step will be displayed. You will have the option to either Print Receipt or Print Deposit. Print Receipt For Print Receipt, click on the transaction and open the form. Click on either Print TD2, TD3, TD4 or TD5 Receipt. 21 Transfer duty on efilling A quick guide

24 The receipt will look like the example below and must be printed and attached to the documentation submitted to the Registrar of Deeds. The electronic receipts / exemptions will be accepted by the Registrar of Deeds. 22

25 Print Deposit Should Print Deposit be displayed in the Next Action column, click on the transaction and open the form. Print the deposit receipt and the form as well as the additional information required by SARS to be uploaded in order for the SARS branch to finalise the transaction. Searching for specific transactions Enter the required information in the Search field to search for a specific transaction. 23 Transfer duty on efilling A quick guide

26 Summary of electronic transactions The TRANSFER DUTY HISTORY screen provides you with a summary of all declarations, reference numbers, the status of each declaration and the next action to be taken. 24

27 8. Terminology 8.1 Status New Transfer Duty Initiated Documents Captured 0%Duty This is for a new transfer duty transaction. This is displayed on the Transfer Duty Dashboard. This status is displayed when a transfer duty form is selected. This status is displayed when the declarations have been submitted. This status is displayed when zero Rand transfer duty is payable. 8.2 Reference Numbers Unallocated Reference Number Payment Reference Number The reference number displays as Unallocated when the Conveyancer opens the Transfer Duty Dashboard for a new transaction This status is displayed when the Conveyancer selects a TD form. This reference number can be utilised to do a search. This reference number is allocated once a payment has been made. 8.3 Legal Documents Incomplete Completed Transaction is locked This status is displayed when a declaration has been saved but not submitted. The Conveyancer can still edit the declaration. This status is displayed when a declaration has been submitted. This occurs when all the declarations have been submitted to SARS. The Conveyancer cannot effect any changes to the declarations. 8.4 Transfer Duty Transactions Authorised Declined Request for Additional Information 0%Duty Payment Refunded Awaiting Authorisation This status is displayed when SARS authorises the transfer duty transaction. This status is displayed when SARS declines the transfer duty transaction. A reason will be supplied by SARS. This status is displayed if SARS requires additional information pertaining to the transfer duty transaction. This status is displayed if the duty payable on a transfer duty transaction is zero Rand. This status will be displayed when SARS issues a refund for a transfer duty transaction. This status is for the SARS Admin user. 25 Transfer duty on efilling A quick guide

28 8.5 Next Action Submit Payment Declaration Print Deposit Print Receipt Transaction Terminated (Locked) This status is displayed for the Conveyancer to effect a payment. This status verifies that the process has been checked by the SARS Admin user and the process is being referred for future authorisation. This status verifies that the whole process has been completed successfully. This status is displayed when the whole transfer duty process is completed. 9. Notes to Transfer Duty forms Please note the following: 1. Any other consideration payable means arrear rates, arrear interest, sheriff s commission and- unreaped crops, growing timber or improvements which formed part of the property at the date of the said purchase or otherwise acquired by the purchaser by means of a separate agreement any consideration payable by the purchaser in terms of an agreement entered into by the seller or a company controlled by him or any subsidiary company thereof or a partnership undertaking in which he is one of the partners to improve the property in any manner or to complete partly completed buildings or other structures on the property any consideration payable by the purchaser in terms of an agreement, condition or understanding between the purchaser and the seller or any other person whereby the purchaser has paid or is due to pay to the seller or any other person in respect of or in connection with the sale or acquisition of the said property any sum of money or valuable consideration over and above the aforesaid amounts, save and except certain charges which fall under Section 7 of the Transfer Duty Act, 1949 any commission or fees paid/payable by the person who acquired the property as exceeds 5% of the consideration payable in respect of the property in all cases where the purchaser is liable the full amount of commission (inclusive of VAT) must be added to the consideration. 2. Bonds granted by means the mortgagee as it appears on the bond. Where the name of the mortgagee is too long, an abbreviated form of the name is acceptable. 3. Consideration - where the purchase price is lower than the fair value of the property, transfer duty is payable on the fair value of the property, which is then referred to as the consideration. 4. VAT registration number of estate agency - if not registered for VAT, state the Income Tax reference number. Where there is no estate agency please indicate n/a (not applicable). 5. For Notarial Deeds i.e. deed of servitude, a TD1, TD2 and TD3 may be submitted. A transferor will be deemed to be a grantor and a transferee will be deemed to be a grantee for these purposes. 6. The declaration should be signed on behalf of - a natural person/individual - by the natural person/individual a company or close corporation - by the public officer a partnership - by the two most senior partners 26

29 a public/local authority - by any person accountable for the receipt and payment of monies on behalf of the authority a corporate or unincorporated body (other than a company) - by the treasurer of the body or any person whose functions are similar to those of a treasurer of the body a deceased person or deceased estate - by the executor or administrator of such estate a trust fund - by the person administering the fund in a fiduciary capacity by a person so authorised to sign, in which case a certified copy of the letter of authorisation must be attached to the declaration a conveyancer - by a partner of the attorney firm and not in the name of the conveyancer in his personal capacity. 7. If the seller has previously sold the property and that sale has been cancelled, that deed of sale and the agreement of cancellation must be furnished with this declaration. 8. A copy of the TD4 declaration and the receipt for the transfer duty must be submitted with the income tax return for the financial year during which the liability for duty arose. 9. The duty is payable within six months of the date of acquisition of the property. 10. Duty is payable at the rates applicable to natural persons if the beneficiaries / shareholders / members are natural persons. 11. The addition to, or the subtraction of all or any of the beneficiaries in a vesting trust will also constitute a transaction for transfer duty purposes. Note: For further information on how to make declarations and payments or to register for efiling, call the SARS Contact Centre on , visit the SARS website at or the efiling website at 27 Transfer duty on efilling A quick guide

30 10. Definitions Please note the following definitions: fair value includes (b) (i) (ii) (iii) (c) (i) (ii) (iii) (f) in relation to a share or member s interest in a company as contemplated in paragraph (d) or (e) of the definition of property, means so much of the fair market value as at the date of acquisition of that share or member s interest, of any property held by that company which constitutes residential property; a share or member s interest in any company as contemplated in paragraph (d) or (e) of the definition of property ; or a contingent right in property of a trust as contemplated in paragraph (f) of the definition of property, (without taking into account any lease agreement, any liability in respect of any loan or any right to or an interest in the use of immovable property conferred on the owner of a share in a share block company as contemplated in section 1 of the Share Blocks Control Act, 1980 (Act No. 59 of 1980), in relation to that residential property or any residential property of any company or trust contemplated in subparagraph (ii) or (iii)), as is attributable to that share or member s interest; or in relation to any contingent right to any property, which constitutes residential property; a share or member s interest contemplated in paragraph (d) or (e) of the definition of property ; or a contingent right in property of a trust as contemplated in paragraph of the definition of property, held by a discretionary trust, means the fair market value of that property (without taking into account any lease agreement or any liability in respect of any loan in relation to that residential property or any residential property of any company or trust contemplated in subparagraph (ii) or (iii)), as at the date of acquisition of that contingent right: Property includes (d) (e) (f) (i) (ii) (iii) a share or member s interest in a residential property company; or a share or member s interest in a company which is a holding company (as defined in the Companies Act, 1973 (Act 61 of 1973) or as defined in the Close Corporations Act, 1984 (Act 69 of 1984), as the case may be), if that company and all of its subsidiary companies (as defined in the Companies Act, 1973, or Close Corporations Act, 1984), would be a residential property company if all such companies were regarded as a single entity; a contingent right to any residential property or share or member s interest, contemplated in paragraph (d) or (e), held by a discretionary trust (other than a special trust as defined in section 1 of the Income Tax Act, 1962 (Act 58 of 1962)), the acquisition of which is- a consequence of or attendant upon the conclusion of any agreement for consideration with regard to property held by that trust; accompanied by the substitution or variation of that trust s loan creditors, or by the substitution or addition of any mortgage bond or mortgage bond creditor; or accompanied by the change of any trustee of that trust; and 28

31 residential property means any dwelling-house, holiday home, apartment or similar abode, improved or unimproved land zoned for residential use in the Republic (including any real right thereto), other than- (a) (b) an apartment complex, hotel, guesthouse or similar structure consisting of five or more units held by a person which has been used for renting to five or more persons, who are not connected persons, as defined in the Income Tax Act, in relation to that person; or any fixed property of a vendor forming part of an enterprise all as defined in section 1 of the Value-Added Tax Act; residential property company means any company that holds property that constitutes- (a) (b) residential property; or a contingent right contemplated in paragraph (f) of the definition of property, and where the fair value of that property or contingent right comprises more than 50 per cent of the aggregate fair market value of all the assets, as defined in paragraph 1 of the Eighth Schedule to the Income Tax Act, (other than financial instruments as defined in section 1 of that Act or any coin made mainly from gold or platinum), held by that company on the date of acquisition of an interest in that company; transaction includes- (b) (c) in relation to any shares or member s interest contemplated in paragraph (d) or (e) of the definition of property, an agreement whereby one party thereto agrees to sell, grant, waive, donate, cede, exchange, issue, buy-back, convert, vary, cancel or otherwise dispose of any such shares or member s interest to another person or any act whereby any person renounces any right in or restriction in his or her favour upon the use or disposal of any such shares or member s interest; or in relation to a discretionary trust, the substitution or addition of one or more beneficiaries with a contingent right to any property of that trust, which constitutes residential property or shares or member s interest contemplated in paragraph (d) or (e) of the definition of property or a contingent right contemplated in paragraph (f) of that definition; 13. The furnishing of false information is a serious offence which can lead to a fine or imprisonment and the imposition of additional duty of up to twice the duty which it was sought to evade. 14. For a sale of a going concern to qualify for the zero rate in terms of section 11(1)(e) of the Value-Added Tax Act, the following requirements must be met, and the necessary proof that the requirements have been met must be furnished with this declaration. The agreement must be in writing and provide that: a. The supply is by a vendor to a registered vendor of an enterprise (or of a part of an enterprise which is capable of separate operation) as a going concern. b. The supplier and the recipient have, at the time of the conclusion of the agreement agreed that the enterprise or part thereof will be an income-earning activity on the date of transfer thereof. c. The assets which are necessary for carrying on such enterprise or part are disposed of by such supplier to such recipient. Details of such assets must be reflected in the sale agreement, failing which, the separate agreement setting out such assets must be furnished. d. The consideration agreed upon for that supply is inclusive of tax at the rate of zero per cent. e. Where the enterprise (or part) is disposed of as a going concern has been carried on mainly for purposes of making taxable supplies, and partly for other purposes, such goods or services shall, where disposed of to such recipient, for the purposes of this paragraph be deemed to form part of such enterprise or part, as the case may be, notwithstanding the provisions of paragraph (v) of the proviso to the definition of an enterprise. 29 Transfer duty on efilling A quick guide

32 Transfer duty on efiling A QUICK GUIDE 30

EXTERNAL GUIDE WITHHOLDING AMOUNTS FROM PAYMENTS TO NON-RESIDENT SELLERS OF IMMOVABLE PROPERTY IN SOUTH AFRICA

EXTERNAL GUIDE WITHHOLDING AMOUNTS FROM PAYMENTS TO NON-RESIDENT SELLERS OF IMMOVABLE PROPERTY IN SOUTH AFRICA Revision: 0 Page 1 of 6 TABLE OF CONTENTS 1 SCOPE 3 2 BACKROUND 3 3 PROCEDURE 3 3.1 COMPLETION